Now could be the right time to take a look at the Vaneck Australian Bank ETF (ASX: MVB) and SPDR S&P/ASX 200 ETF (ASX: STW). Using our internal quantitative analysis, these ETFs seem to offer strong exposure to the Australian shares sector.
Here’s how we think about the MVB and STW ETFs
The VanEck MVB ETF provides focused exposure to Australia’s largest industry, the banking sector. This is a low-cost way to invest in the Australian banking industry through a single fund.
The SPDR STW ETF is Australia’s first ETF and has been operating for over 15 years. STW provides exposure to the largest 200 Australian shares, based on market capitalisation. This is a low-cost way to access top Australian companies through a single fund.
Get our team’s MVB ETF review, available free when you click this link: access the free investment report.
To make this article easier to digest, we’ll just study the fees or ‘management expense ratio’ (MER). Using data for December 2021, the MVB ETF has an MER of 0.28% while the STW ETF had a yearly fee of 0.13%. So, STW wins on this metric. Keep in mind, a more insightful metric to know is the fee quartiles that these ETFs find themselves in (note: quartile 1 is best). Meaning, we take all the Australian shares ETFs in our database and put them into 4 quartiles, based on their fees. For example, any ETF which has a fee below 0.3% would be considered in our first (best) quartile.
Track record
Let’s look at the past results. Keep in mind, performance isn’t everything — and past performance is not indicative of future performance. It’s just one part of a much bigger picture. The reason we say performance is not everything is because of volatility of financial markets and the economy from one year to the next. Some ETFs and funds can put in a strong return one year just to generate weak returns the next time around. That’s why we prefer three-year or seven-year track records over one-year track records. It can smooth out the temporary performances caused by external factors. Both ETFs have achieved our three-year performance hurdle. As of December 2021, the MVB ETF had an average annual return of 12.62%. During the same time, the STW ETF returned 14.83%.
In summary
To keep reading about these two ETFs, be sure to visit our free MVB ETF report or STW ETF review.
In summary, the STW ETF ranks better against our internal scoring methodology but not by much compared to MVB.
Please, keep in mind, there is much more to choosing a good ETF. That’s why you should now use these skills to find the best ETF you can. If you want the name of our team’s top ETF pick for 2022, keep reading…
